Glaxo to pay $750 million in defective drug settlement

By Dr. Ananya Mandal, MDOct 26 2010

GlaxoSmithKline Plc, one of the world’s largest pharmaceutical companies, has agreed to pay $750 million to settle a U.S. government false-claims lawsuit over the sale of defective drugs. The lawsuit first filed in 2004 by Cheryl D. Eckard, a former global quality assurance manager for the London-based company came to a settlement finally. Eckard, 51, said, “This is not something I wanted to do, but because of patient safety it was necessary.” Being the one to bring this to notice she would receive $96 million from the settlement money. She had warned the company earlier but was fired because of her efforts.

Among the charges faced by Glaxo the medicines, made at a Glaxo plant in Cidra, Puerto Rico, were misidentified as a result of product mix-ups. The affected drugs included the antidepressant Paxil CR and the diabetes treatment Avandamet. The settlement includes a criminal fine and forfeiture totaling $150 million and a $600 million civil settlement under the False Claims Act and related state claims, the Justice Department said in a statement. Carmen M. Ortiz, the U.S. Attorney in Boston said, “We will not tolerate corporate attempts to profit at the expense of the ill and needy in our society -- or those who cut corners that result in potentially dangerous consequences to consumers.”

SB Pharmco Puerto Rico Inc., a Glaxo unit finally pleaded guilty to charges relating to the manufacture and distribution of adulterated drugs made at the plant. PD Villarreal, a Glaxo senior vice president wrote, “We regret that we operated the Cidra facility in a manner that was inconsistent with current Good Manufacturing Practice requirements and with GSK’s commitment to manufacturing quality.”

The federal government will receive $436.4 million from the settlement and participating states will split as much as $163.6 million, the Justice Department revealed.

There were other drugs manufactured at the unit. This includes Kytril, an anti- nausea medication, Bactroban, an ointment used to treat skin infections, Coreg a drug for heart disease and Tagamet an acid reflux drug.. Altogether, GlaxoSmithKline sold 20 drugs with questionable safety. The court papers read, “The false claims arose out of chronic, serious deficiencies in the quality assurance function at the Cidra plant and the defendants’ ongoing serious violations of the laws and regulations designed to ensure the fitness of drug products for use.” The U.S. Food and Drug Administration in 2005 laid their hands on some Paxil CR lots after it was discovered that the pills sometimes split inappropriately. Some of the pills lacked an active ingredient. Ortiz said, “We did not uncover any evidence that patients were harmed from these adulterated batches…It is critical we keep pressure on companies to follow FDA standards and play by the rules.”

Eckard’s complaint was joined by the states of California, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Louisiana, Massachusetts, Michigan, Nevada, New Hampshire, New Mexico, New York, Tennessee, Texas and Virginia, as well as the District of Columbia, Chicago and New York City.